Former New York State Assemblyman & Labor Leader Guilty Of Racketeering

MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, MARK J. MERSHON, the Assistant
Director-in-Charge of the New York Office of the Federal Bureau
of Investigation (“FBI”), GORDON S. HEDDELL, the Inspector
General of the United States Department of Labor (“DOL-OIG”), and
ROSE GILL HEARN, the Commissioner of the New York City Department
of Investigation (“DOI”), announced the guilty plea today of
BRIAN M. McLAUGHLIN, 55, a former New York State Assemblyman and
labor leader, to a federal racketeering charge. McLAUGHLIN also
pleaded guilty to making false statements in a loan application
to a federally-insured financial institution. McLAUGHLIN entered
his plea before United States District Judge RICHARD J. SULLIVAN.
According to the Indictment and statements made at the guilty
plea proceeding:

McLAUGHLIN functioned as the highest ranking official
of the J Division of Local 3 of International Brotherhood of
Electrical Workers (“IBEW”), which represents electrical workers
in New York City. Members of the J Division typically install
and maintain street lights and traffic signals in New York City.
McLAUGHLIN stole money from a J Division bank account; accepted
payments from union contractors; secretly maintained an interest
in a company doing business with union employers and used his
position as a union official to advance that company’s, and thus
his own, financial interests by pressuring contractors to buy
certain products in order to perform City contracts; and directed
the activities of J Division members for his own personal gain
and profit.

McLAUGHLIN misappropriated well over $100,000 dollars
from a J Division account that was maintained for the benefit of
the J Division and its membership. The account was funded
largely by deductions from union members’ paychecks, as well as
by contributions from contractors to support the union.
McLAUGHLIN used these union funds to pay his personal credit card
bills and his country club dues, among other uses. McLAUGHLIN
also accepted hundreds of thousands of dollars in payments from
contractors that employed J Division union members, along with
vehicles and other personal benefits. In one instance, according
to the Indictment, McLAUGHLIN permitted a contractor to employ
fewer union members in exchange for these payments.

McLAUGHLIN also served as the President of the New York
City Central Labor Council (the “CLC”), a chartered affiliate of
the American Federation of Labor and Congress of Industrial
Organizations (“AFL-CIO”). McLAUGHLIN misappropriated
approximately $185,000 from the CLC. McLAUGHLIN caused the CLC
to hire one person as both a consultant and an employee who did
little or no substantial work, and then funneled income from the
CLC back to McLAUGHLIN. McLAUGHLIN then used the proceeds of
this scheme to pay for his personal expenses, including rental
payments for a residence that he maintained in Queens; payments
for a car driven by one of his children; and mortgage payments
for a new home in Nissequogue, Long Island.

As a former New York State Assemblyman, McLAUGHLIN
represented the 25th Assembly District in Queens, New York. In
that capacity, McLAUGHLIN misappropriated over $35,000 from the
State of New York. McLAUGHLIN created fictitious positions on
his legislative staff and pocketed a share of the salary for one
of the purported employees, and he also submitted false claims
for reimbursement of his daily expenses.
McLAUGHLIN faces a maximum sentence of 20 years’
imprisonment on the racketeering charge; and an additional
maximum sentence of 30 years’ imprisonment on the charge of
making a false statement in a loan application.

In addition, as
part of his guilty plea today, McLAUGHLIN admitted to forfeiture
allegations in connection with these counts that seek forfeiture
of $2.2 million in illicit proceeds from McLAUGHLIN’s crimes, as
well as a residence located in Nissequogue, New York, and other

Judge SULLIVAN scheduled McLAUGHLIN’s sentencing for
September 12, 2008.

Mr. GARCIA praised the FBI, DOL-OIG, and DOI for the
investigation of this case and thanked them for their work. Mr.
GARCIA said the investigation is continuing.
This case is being handled by the Office’s Public
Corruption Unit. Assistant United States Attorneys DANIEL BRAUN
and MICHAEL LEVY are in charge of the prosecution.
08-061 ###

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